UBS posts strong net income, outlook weighs on Swiss Banking giant
Swiss titan UBS recorded sharp returns that exceeded bottom-line expectations.
Quick overview
- UBS reported a net profit of $1.692 billion, exceeding analyst expectations of $1.359 billion.
- Group revenue for the quarter was $12.557 billion, falling short of the anticipated $12.99 billion.
- The investment banking unit saw a 32% year-over-year increase in global markets revenue, driven by higher client activity.
- Concerns about potential new capital requirements from Swiss authorities could impact UBS's long-term profitability.
Swiss titan UBS recorded sharp returns that exceeded bottom-line expectations. Net profit to shareholders reached $1.692 billion during the quarter, surpassing the anticipated $1.359 billion derived from the LSEG analyst poll. Group revenue for the period was $12.557 billion, falling short of analyst expectations of $12.99 billion.
The return on tangible equity estimate was set at 8.5%, surpassing the 3.9% benchmark established during the last quarter
The lender noted an increase in revenues in the global markets unit of its investment banking arm, rising 32% year-over-year. This growth was driven by higher client activity in equities and foreign exchange, with gains across all regions.
Most importantly, the lender reported net interest income of $1.629 billion, which is the revenue generated from loans and investments after deducting deposits and payments.
This figure was slightly down year-on-year, reflecting an 11% decline in a quarter. Furthermore, they expect a downturn in the June quarter.
Concerns about possible new, harsher capital requirements from Swiss authorities, who have questioned the Swiss behemoth’s “too big to fail” status since it acquired the defunct domestic rival Credit Suisse, continue to cast a shadow over UBS’ long-term profitability.
The acquisition, which one legislator called the “deal of the century,” has caused UBS to fight as hard as possible against additional regulations that it claims would make it less competitive as a company with sufficient capital.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Related Articles
Comments
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals